Alternative Fuel Transportation Program; Private and Local Government Fleet Determination

[Federal Register: September 14, 2007 (Volume 72, Number 178)]
[Proposed Rules]
[Page 52496-52506]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr14se07-14]

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Proposed Rules
Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.

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[[Page 52496]]
DEPARTMENT OF ENERGY
Office of Energy Efficiency and Renewable Energy
10 CFR Part 490
RIN 1904-AB69

Alternative Fuel Transportation Program; Private and Local
Government Fleet Determination

AGENCY: Office of Energy Efficiency and Renewable Energy, Department of
Energy (DOE).
ACTION: Notice of proposed determination and public hearing.

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SUMMARY: Pursuant to the Energy Policy Act of 1992 (EPAct 1992), the
Department of Energy (DOE) proposes to determine that a regulatory
requirement for the owners and operators of certain private and local
government fleets to acquire alternative fueled vehicles (AFVs) is not
necessary to achieve the recently modified EPAct 1992 Replacement Fuel
Goal. DOE therefore also proposes to determine that it cannot issue a
requirement for certain private and local government fleets to acquire
alternative fueled vehicles.

DATES: Written comments (eight copies and, if possible, an e-mail copy)
on the proposed determination must be received by DOE on or before
November 13, 2007; electronic copies of comments may be sent to the e-
mail address listed below.
Oral views, data, and arguments may be presented at the public
hearing, which will be held from 9 a.m. until 4 p.m. on October 17,
2007. The length of each oral presentation is limited to 10 minutes.
The public hearing will be held at the U.S. Department of Energy, Room
GH-019, Forrestal Building, 1000 Independence Avenue, SW., Washington,
DC 20585-0121. Requests to speak at the hearing must be submitted to
DOE no later than 4 p.m. on October 10, 2007.

ADDRESSES: Written comments (eight copies) and requests to speak at the
public hearing should be addressed to: U.S. Department of Energy,
Office of Energy Efficiency and Renewable Energy, EE-2G, RIN 1904-AB69,
1000 Independence Avenue, SW., Washington, DC 20585-0121. E-mails may
be sent to: regulatory_info@afdc.nrel.gov. Comments may also be
submitted through the Federal Rulemaking Portal at http://www.regulations.gov.
DOE is currently using Microsoft Word.
Organizations are strongly encouraged to submit comments
electronically, to facilitate timely receipt of comments and ease
inclusion in the electronic docket.
Copies of this notice, the transcript from the hearing, and written
comments will be placed at the following Web site address:
http://www1.eere.energy.gov/vehiclesandfuels/epact/private/index.html.

Interested parties may also access these documents using a computer in
DOE's Freedom of Information (FOI) Reading Room, U.S. Department of
Energy, Forrestal Building, Room 1E-190, 1000 Independence Avenue, SW.,
Washington, DC 20585-0121, (202) 586-3142, between the hours of 9 a.m.
and 4 p.m., Monday through Friday, except Federal holidays. For more
information concerning public participation in this rulemaking, see the
``Opportunity for Public Comment'' section found in the SUPPLEMENTARY
INFORMATION section of this notice.

FOR FURTHER INFORMATION CONTACT: For information concerning this
notice, contact Mr. Dana V. O'Hara, Office of Energy Efficiency and
Renewable Energy (EE-2G), U.S. Department of Energy, 1000 Independence
Avenue, SW., Washington, DC 20585-0121; (202) 586-9171;
regulatory_info@afdc.nrel.gov; or Mr. Chris Calamita, Office of the General

Counsel, U.S. Department of Energy, 1000 Independence Avenue, SW.,
Washington, DC 20585-0121; (202) 586-9507.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Introduction
II. Statutory Requirements
A. Definitions
B. Key Statutory Requirements
C. Other Related Requirements
D. No Fuel Use Requirement Authority
III. Background
A. History
B. Previous Rulemakings and Related Court Rulings
IV. Analysis for Private and Local Fleets Rule Determination
A. Achievability of the Replacement Fuel Goal
B. Potential Contribution of a Private and Local Government
Fleet Requirement to the Production Capacity of Alternative Fuel
V. Proposed Determination
VI. Opportunity for Public Comment
A. Participation in Rulemaking
B. Written Comment Procedures
C. Public Hearing Procedures
VII. Regulatory Review
VIII. Approval by the Office of the Secretary

I. Introduction

Under the Energy Policy Act of 1992 (EPAct 1992; Pub. L. 102-486),
DOE is required to determine if a requirement for certain private and
local government vehicle fleets to acquire alternative fueled vehicles
(AFVs) is necessary, as specified in EPAct 1992. (42 U.S.C. 13257(e))
If DOE determines that the Private and Local Government Fleet
Requirement is ``necessary,'' then DOE must issue regulations requiring
certain fleets to acquire light-duty AFVs annually. (42 U.S.C.
13257(g)) Fleets subject to such a mandate would include all fleets
that have at least 50 light duty motor vehicles, and would exclude
Federal fleets, State fleets, and fleets covered under the Alternative
Fuel Provider mandate. (42 U.S.C. 13257(g)(1)) If DOE determines that
the Private and Local Government Fleet Requirement is not necessary
then DOE must publish such determination in the Federal Register as a
final agency action, including an explanation of the findings on which
such a determination is made and the basis for the determination. (42
U.S.C. 13257(f))
Relevant to the evaluation of a Private and Local Government Fleet
Requirement is the replacement fuel goal established in section 502(b)
of EPAct 1992. (42 U.S.C. 13252(b)) Section 502(b)(2) establishes goals
of producing sufficient replacement fuels to replace:
At least ten percent by the year 2000, and at least thirty percent
by the year 2010 of the projected consumption of motor fuel in the
United States for each such year, with at least half of such
replacement fuels being domestic fuels. (Replacement Fuel Goal; 42
U.S.C. 13252(b)(2)) Under section 504(b) of EPAct 1992, if DOE
determines that the

[[Page 52497]]

section 502 goals are unachievable, DOE must establish achievable
goals. (42 U.S.C. 13254(b))
In determining whether to establish a Private and Local Government
Fleet Requirement, DOE is directed to determine if such a requirement
is ``necessary.'' (42 U.S.C. 13257(e)(1)) The ``necessity''
determination is a two part test. First, DOE must determine if the
Replacement Fuel Goal established under section 502, or as modified
under section 504 of EPAct 1992, is achievable absent a Private and
Local Government Fleet Requirement. (42 U.S.C. 13257(e)(1)(A)) Next,
the ``necessity'' determination requires DOE to determine if such a
goal is practicable and actually achievable through implementation of a
Private and Local Government Fleet Requirement in combination with
voluntary means and other relevant programs. (42 U.S.C. 13257(e)(1)(B))
If DOE determines that the Replacement Fuel Goal is not achievable
absent the Private and Local Fleet Requirement, and that such goal
would be practicable and actually achievable through implementation of
such a requirement, DOE must then establish the Private and Local Fleet
Requirement under section 507(g). (42 U.S.C. 13257(e)(1)) If either of
these findings cannot be made, then DOE is precluded from establishing
the Private and Local Fleet Requirement under section 507(g).
Under the Private and Local Government Fleet provisions, if DOE
initiates a rulemaking under section 507(g), DOE is again directed to
determine whether to modify the Replacement Fuel Goal. (42 U.S.C.
13257(e)(2)) If the Replacement Fuel Goal is not achievable, DOE has to
set a Replacement Fuel Goal that is achievable. (42 U.S.C. 13257(e)(2))
In a previous rulemaking, DOE has already determined that the
original Replacement Fuel Goal of 30 percent in 2010 is not achievable
and a modified Replacement Fuel Goal of 30 percent by 2030 was
published March 15, 2007. 72 FR 12042. The purpose of today's document
is to propose a determination whether or not the Private and Local
Government Fleet Requirement is necessary to achieve the modified
Replacement Fuel Goal.
DOE proposes to determine that it is not ``necessary'' to
promulgate a regulation requiring private and local government fleets
to acquire AFVs. DOE has initially determined that establishment of a
Private and Local Government Fleet Requirement is not required for
achievement of the Replacement Fuel Goal of 30 percent of U.S. motor
fuels by 2030, as modified by DOE in March 2007. 72 FR 12041. As
discussed below, this initial determination is based on DOE's analysis
in revising the Replacement Fuel Goal, under which DOE demonstrated a
pathway to achieve the modified Replacement Fuel Goal without
establishment of a Private and Local Government Fleet Requirement. 72
FR 12041. Additionally, DOE also provides an analysis initially
demonstrating that were a Private and Local Government Fleet
Requirement established, the number of fleets potentially covered by
such a requirement, the number of AFVs likely to be acquired, and the
amount of replacement fuel likely displaced would not make an
appreciable contribution towards achieving the modified Replacement
Fuel Goal.
Today's document implements the March 6, 2006 order of the U.S.
District Court for Northern District of California to prepare and
publish a proposed determination on the Private and Local Government
Fleets rule. See Center for Biological Diversity v. U.S. Department of
Energy et. al., C 05-01526 WHA (N.D. Cal. 2006) (Order Re Timing of
Relief).

II. Statutory Requirements

A. Definitions

Under EPAct 1992, an ``alternative fuel vehicle'' is a ``dedicated
vehicle or a dual fueled vehicle.'' (42 U.S.C. 13211(3))
A ``dedicated vehicle'' means ``a dedicated automobile, such as the
term is defined in section 513(h)(1)(D) of the Motor Vehicle
Information and Cost Savings Act or a motor vehicle other than an
automobile, that operates solely on alternative fuels.'' (42 U.S.C.
13211(6))
A ``dual fuel vehicle'' is one ``capable of operating on
alternative fuel and on gasoline or diesel fuel.'' (42 U.S.C.
13211(8)(A)) DOE notes that because a dual fueled vehicle can be
operated on gasoline or diesel, the purchase of a dual fueled vehicle
does not assure that ``alternative'' or ``replacement'' fuel will be
used to operate the vehicle.
``Replacement fuel'' is defined by EPAct 1992 under section 301(14)
to mean ``the portion of any motor fuel that is methanol, ethanol, or
other alcohols, natural gas, liquefied petroleum gas, hydrogen, coal
derived liquefied fuels, fuels (other than alcohol) derived from
biological materials, electricity (including electricity from solar
energy), ethers, or any other fuel that the Secretary determines meets
certain statutory requirements.'' (42 U.S.C. 13211(14); emphasis
added).
``Alternative fuel'' is defined to include many of the same types
of fuels as ``replacement fuel'' (such as methanol, natural gas,
hydrogen and electricity), but also includes certain ``mixtures'' of
petroleum-based fuel and other fuels. (10 CFR 490.2 (2002) \1\) Thus, a
certain mixture might constitute an ``alternative fuel,'' but only the
portion of the fuel that is within the definition of ``replacement
fuel'' would actually constitute ``replacement fuel.'' For example, a
mixture of 85 percent methanol and 15 percent gasoline would, in its
entirety, constitute ``alternative fuel,'' but only the 85 percent that
was methanol would constitute ``replacement fuel.'' Also by way of
example, B20 (a fuel blend typically consisting of approximately 20
percent biodiesel and 80 percent diesel), considered as a total fuel
blend, would not qualify as an ``alternative fuel,'' but the 20 percent
that is biodiesel would qualify as ``replacement fuel.''
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\1\ EPAct defines ``alternative fuel'' (see 42 U.S.C. 13211(2)),
but DOE has exercised its authority to modify, by regulation, this
definition. Therefore, the currently effective definition of
``alternative fuel'' is set forth at 10 CFR 490.2 (2006).
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For the purpose of considering a Private and Local Government Fleet
Requirement, the term ``covered fleet'' is a ``fleet, other than
Federal fleet, State fleet, or fleet owned, operated, leased, or
otherwise controlled by a covered person under section 501 [of EPAct
1992].'' (42 U.S.C. 13257(g)) This is interpreted to mean all private
and local government fleets not already covered under the existing
fleet requirements program.
A ``fleet'' is defined in section 301(9) of EPAct 1992 as follows:

[T]he term ``fleet'' means a group of 20 or more light duty
motor vehicles, used primarily in a metropolitan statistical area or
consolidated metropolitan statistical area, as established by the
Bureau of the Census, with a 1980 population of more than 250,000,
that are centrally fueled or capable of being centrally fueled and
are owned, operated, leased, or otherwise controlled by a
governmental entity or other person who owns, operates, leases, or
otherwise controls 50 or more such vehicles, by any person who
controls such person, by any person controlled by such person, and
by any person under common control with such person, except that
such term does not include--
(A) Motor vehicles held for lease or rental to the general
public;
(B) Motor vehicles held for sale by motor vehicle dealers,
including demonstration motor vehicles;
(C) Motor vehicles used for motor vehicle manufacturer product
evaluations or tests;
(D) Law enforcement motor vehicles;
(E) Emergency motor vehicles;
(F) Motor vehicles acquired and used for military purposes that
the Secretary of

[[Page 52498]]

Defense has certified to the Secretary must be exempt for national
security reasons;
(G) Nonroad vehicles, including farm and construction motor
vehicles; or
(H) Motor vehicles which under normal operations are garaged at
personal residences at night.

(42 U.S.C. 13211(9))
The key limitations in this definition include: (1) Only light duty
vehicles (i.e., vehicles less that 8,500 GVWR) are covered, and all
medium-duty and heavy duty vehicles are excluded; (2) the vehicles must
be part of a fleet of 20 vehicles used primarily in a large
metropolitan area; (3) the vehicles must be centrally fueled or capable
of being centrally fueled; (4) they must be owned or controlled by a
local government or an entity that owns at least 50 such vehicles; (5)
fleets of rental vehicles are excluded; (6) law enforcement and
emergency vehicles are excluded; and (7) vehicles garaged at personal
residences are excluded.
The Replacement Fuel Goal is in terms of producing sufficient
replacement fuels to replace on an energy equivalent basis, a specified
percentage of the projected consumption of motor fuel in the United
States for each such year, with at least one half of such replacement
fuels being domestic fuels. (42 U.S.C. 13252(b)(2))
Section 301(12) of EPAct 1992 defines ``motor fuel'' as ``any
substance suitable as fuel for a motor vehicle.'' (42 U.S.C. 13211(12))
Moreover, the term motor vehicle is defined in section 301(13) of EPAct
1992, through reference to 42 U.S.C. 7550(2), as a self-propelled
vehicle that is designed for transporting persons or property on a
street or highway. (42 U.S.C. 13261(13)) As DOE is required to evaluate
the Replacement Fuel Goals established in section 502(b)(2) in terms of
the capacity of producing sufficient replacement fuels to offset a
certain percentage of U.S. ``motor fuel'' consumption, DOE, for the
purposes of Title V of EPAct 1992, has interpreted the term motor fuel
to include all fuels that are used in motor vehicles. This includes
fuels used in light-, medium-, and heavy-duty on-road vehicles. 71 FR
54771 (September 9, 2006)

B. Key Statutory Requirements

The issue DOE addresses in this document is whether a Private and
Local Government Fleet Requirement is ``necessary'' under section
507(e) of EPAct 1992. (42 U.S.C. 13257(e)(1)) Under section 507(e)(1) a
Private and Local Government Fleet shall be promulgated if DOE
determines such a program is ``necessary.'' (42 U.S.C. 13257(e)(1)) A
Private and Local Government Fleet Requirement ``shall be considered
necessary'' only if (1) DOE finds that ``the goal of replacement fuel
use * * * is not expected to be actually achieved * * * without such a
fleet requirement program;'' and (2) ``such goal is practicable and
actually achievable * * * through implementation of such a fleet
requirement program in combination with voluntary means and the
application of other programs relevant to achieving such goals.'' (42
U.S.C. 13257(e)(1)(A) and (B))
EPAct 1992 authorizes DOE to conduct two separate rulemakings in
order to determine whether to promulgate a Private and Local Government
Fleet Requirement. First, section 507(b) directs DOE to conduct an
early rulemaking, to be completed by December 15, 1996. (42 U.S.C.
13257(b)) The deadline for the ``early rulemaking'' passed without
final action and has no continuing relevance. The second rulemaking
provision is under section 507(e), which directs DOE to make a
``necessity'' determination by January 1, 2000. (42 U.S.C. 13257(e)(1))
It is under section 507(e) that DOE issues today's document.

C. Other Related Requirements

There are a number of other sections of EPAct 1992 which must be
weighed in considering a potential Private and Local Government Fleet
Requirement, primarily under the second prong of the ``necessity''
determination. These considerations include how such a requirement
would be limited in application and practice, and other considerations
and steps related to the determination process.
Under section 507(i), a promulgated Private and Local Government
Fleet Requirement must provide for an exemption of a fleet from the
applicable requirements on grounds of: (1) Non-availability of
appropriate AFVs and alternative fuels; (2) non-availability of
appropriate alternative fuels; and (3) with respect to local government
entities, financial hardship. (42 U.S.C. 13527(i))
EPAct 1992 furthermore contains a petition provision in section
507(n). That section provides that:

As part of the rule promulgated * * * pursuant to subsection * *
* (g) of this section, the Secretary shall establish procedures for
any fleet owner or operator or motor vehicle manufacturer to request
that the Secretary modify or suspend a fleet requirement program * *
* nationally, by region, or in an applicable fleet area because, as
demonstrated by the petitioner, the infrastructure or fuel supply or
distribution system for an applicable alternative fuel is inadequate
to meet the needs of a fleet.

(42 U.S.C. 13527(n)) As a result, even to the extent a fleet
constitutes a ``fleet'' under the narrow EPAct 1992 definition, and
does not otherwise qualify for one of the statutory exemptions, it
could petition for relief or suspension of a fleet mandate for any one
of several different reasons.
Section 507(m) of EPAct 1992 requires DOE to consult with the
Secretary of Transportation (DOT) and Administrator of the
Environmental Protection Agency (EPA) and other appropriate agencies in
carrying out the requirements of section 507. DOE provided a pre-
publication draft of today's notice of proposed rulemaking to DOT, EPA,
and the Office of Management and Budget for their review.

D. No Fuel Use Requirement Authority

It is important to note that the ability of a Private and Local
Government Fleet Requirement to affect petroleum consumption also
depends, in significant part, on whether DOE can require covered fleets
to use alternative or replacement fuels in addition to requiring that
they acquire AFVs. The only explicit requirements for fuel use in EPAct
1992 are contained in section 501(a)(4), which applies only to
alternative fuel provider fleets, and section 302(a)(2) (amending
section 400AA of the Energy Policy and Conservation Act), which applies
only to Federal fleets. (42 U.S.C. 13251(a)(4) and 6374(a)) Section 507
of EPAct 1992, which concerns private and local government fleets, does
not contain any similar provision, nor does it contain a provision
either authorizing DOE to mandate fuel use or explicitly prohibiting
DOE from mandating fuel use.
DOE believes that because Congress specifically required use of
alternative fuel in sections 501(a)(4) and 302(a)(2) of EPAct 1992, but
not in section 507, the omission was deliberate. As a result, DOE
believes that Congress did not intend for DOE, when acting under
section 507, to have authority to promulgate regulations containing a
requirement that fleet vehicles use particular types of fuel.
This interpretation is consistent with Congressman Philip Sharp(s
remarks when he called up the conference report on EPAct 1992 for U.S.
House of Representatives approval. Congressman Sharp was one of the key
architects of EPAct 1992, and the floor manager for the bill in the
House of Representatives. Congressman Sharp said:

Under section 501, covered persons must actually run their
alternative fueled vehicles on alternative fuels when the vehicle is

[[Page 52499]]

operating in an area where the fuel is available. This requirement
was not included in the fleet requirement program under section 507,
because the conferees were concerned that the alternative fuel
providers might charge unreasonable fuel prices to the fleets that
are not alternative fuel providers if such fleets were required to
use the alternative fuel.

138 Cong. Rec. H11399 at H11400 (October 5, 1992).

III. Background

On August 7, 1996, and as required by EPAct 1992 sections 507(a)(3)
and (b), DOE published in the Federal Register an advance notice of
proposed rulemaking (ANOPR) to evaluate progress toward achievement of
the Replacement Fuel Goals in EPAct 1992, identify problems with
achieving those goals, assess the adequacy and practicability of the
goals, and consider actions needed to achieve the goals. 61 FR 41032.
DOE intended this notice to stimulate comments to assist DOE in making
decisions concerning future rulemaking actions and non-regulatory
initiatives to promote alternative fuels and AFVs. Three hearings were
held to receive oral comments on the ANOPR. They were held on September
17, 1996, in Dallas, Texas; on September 25, 1996, in Sacramento,
California; and on October 9, 1996, in Washington, DC. A total of 70
persons spoke at the three hearings, and 105 written comments were
received by November 5, 1996.
On April 23, 1997, DOE published in the Federal Register a Notice
of Termination stating that DOE would not promulgate regulations to
implement AFV requirements for private and local government fleets
pursuant to the early rulemaking schedule of EPAct 1992 section
507(a)(1). 62 FR 19701.
On April 17, 1998, and for the purposes of EPAct 1992 sections
507(e), (g), and (k), DOE published in the Federal Register an ANOPR
that asked for comments to assist DOE in making decisions concerning
future rulemaking actions and non-regulatory initiatives to promote
alternative fuels and alternative fueled vehicles. 63 FR 19372. DOE
held three hearings to receive oral comments on the ANOPR. They were
held on May 20, 1998, in Los Angeles, California; on May 28, 1998, in
Minneapolis, Minnesota; and on June 4, 1998, in Washington, DC. A total
of 110 persons spoke at the three hearings, and/or submitted written
comments.
On January 12, 2000, consistent with section 507(h) of EPAct 1992
(42 U.S.C. 13257(h)), DOE published in the Federal Register a notice,
stating that it was extending by 90 days the January 1, 2000, deadline
contained in section 507(e) in order to provide additional time for
consultations with State and local officials, as required by Executive
Order 13132. 65 FR 1831. On July 20, 2000, DOE published in the Federal
Register a notice further extending the comment period in order to
provide an opportunity for additional public comment, particularly
comment from State and local governments, regarding the section 507
rulemaking proceedings. 65 FR 44987. DOE held workshops on August 1,
2000 in Chicago, Illinois; on August 22, 2000, in Denver, Colorado; and
on September 26, 2000, in Washington, DC.
On January 2, 2002, EarthJustice, on behalf of the Center for
Biological Diversity, Bluewater Network, and Sierra Club, filed a
lawsuit in the U.S. District Court for the Northern District of
California which, in part, sought to compel DOE to ``issue a proposed
rule and final determination on the necessity of a private and
municipal fleet program.'' (Plaintiffs Complaint for Injunctive and
Declaratory Relief, pg 55, paragraph 171 dated January 2, 2002). On
July 26, 2002, the Court granted plaintiffs' motion for summary
judgment on the issue of whether DOE had missed the deadline set forth
in EPAct 1992 section 507(e) for completing the rulemaking. See Center
for Biological Diversity v. Abraham, et al. (218 F.Supp.2d 1143 (N.D.
Cal., 2002)). On September 27, 2002, the District Court ordered DOE to
complete its proposed rulemaking by January 27, 2003, and its final
rule by November 27, 2003. See Center for Biological Diversity v.
Abraham, et al., No. C 02-00027 (N.D. Cal., 2002). On January 17, 2003,
the Court subsequently granted a 30-day extension (to February 26,
2003) of the deadline for DOE to complete work on this notice of
proposed rulemaking. (Center for Biological Diversity v. Abraham, et
al. No. C 02-00027 (N.D. Cal., 2002), Order No. 55 (Entered 01/23/
2003)).
On March 4, 2003, as required by section 507 of EPAct 1992 and in
accordance with a Court order under Center for Biological Diversity v.
Abraham, et al., DOE issued a notice of a proposed determination
regarding the Private and Local Fleet Requirement, in which DOE
tentatively determined that a requirement was not ``necessary,'' and
therefore should not be imposed. 68 FR 10320. DOE finalized the
proposed determination that a regulation requiring private and local
government fleets to acquire AFVs is not ``necessary'' and, therefore,
cannot be promulgated, which was published January 29, 2004. 69 FR
4219. The necessity determination was based on DOE's findings that a
private and local government fleet vehicle acquisition mandate would
not appreciably increase the percentage of alternative fuel or
replacement fuel used in motor vehicles in the United States and thus
would make no more than a negligible contribution to the achievement of
EPAct 1992's existing 2010 Replacement Fuel Goal of 30 percent, or of a
revised Replacement Fuel Goal were one adopted.
Subsequent to the publication of the January 29, 2004, final rule,
DOE was sued in Federal court by the Center for Biological Diversity
and Friends of the Earth for failing to impose a private and local
government fleet acquisition mandate and for not revising the
replacement fuel production goal for 2010 as part of its determination.
On March 6, 2006, the U.S. District Court for the Northern District of
California vacated DOE's final determination regarding the Private and
Local Government Fleet Mandate and ordered DOE to revise the
replacement fuel production goal for 2010. See Center for Biological
Diversity v. U.S. Department of Energy et al., 419 F.Supp. 2d 1166
(N.D. Cal 2006). The Court directed DOE to prepare notices of proposed
rulemaking and final rules on both the Replacement Fuel Goal for 2010
and the private and local government fleet determination. (Id. at
1171.)
On September 19, 2006, DOE published a notice announcing its
proposed determination that the EPAct 1992 Replacement Fuel Goal of 30
percent by 2010 was not achievable and announced its proposal to extend
the time for achieving the 30 percent replacement fuel production
capacity goal to 2030. 71 FR 54771. In that notice, DOE evaluated four
scenarios, which identified projected replacement fuel capacities of
8.65 percent, 17.84 percent, 35.25 percent, and 47.06 percent, by 2030.
(Updated analyses conducted for the final rule resulted in the first
and third of these becoming 7.38 percent and 33.13 percent,
respectively.) These projections reflected considerations of numerous
variables including oil prices, technological breakthroughs, and market
acceptance. The modified goal proposed by DOE fell in the mid-range
among these scenarios.
On March 15, 2007, DOE published a final rule for the Replacement
Fuel Goal. 72 FR 12041. In the final rule, DOE determined that the
EPAct 1992 goal of establishing sufficient replacement fuel production
capacity to replace 30 percent on an energy equivalent basis of all
U.S. motor fuel by 2010 was not achievable. This

[[Page 52500]]

determination was based on a similar evaluation of the projected U.S.
production capacity of replacement fuels as was presented in the notice
of proposed rulemaking. The Replacement Fuel Goal final rule extended
the 30 percent Replacement Fuel Goal out to 2030 based on an analysis
similar to that presented in the notice of proposed rulemaking. The
Replacement Fuel Goal final rule complied with DOE's obligation under
section 504(b) of EPAct 1992 to ``establish goals that are achievable,
for the purposes of this title.'' (42 U.S.C. 13254(b))
Today's document revisits the Local and Private Fleet Requirement
determination in light of the modified Replacement Fuel Goal.

IV. Analysis for Private and Local Fleets Rule Determination

As stated above, DOE must issue a Private and Local Government
Fleet Requirement if DOE determines that such a requirement is
``necessary.'' (42 U.S.C. 13257(e)(1)) For the purpose of this
determination, a Private and Local Government Fleet Requirement is
necessary if:
(1) The Replacement Fuel Goal under section 502(b)(2)(B), or as
modified under section 504, is not actually expected to be achieved by
the 2010, or the date established under section 504, without such a
fleet requirement; and
(2) Such a goal is practicable and actually achievable within the
appropriate period, through implementation of such a fleet requirement
in combination with voluntary means and the application of other
programs relevant to achieving such goals.

(42 U.S.C. 13257(e)(1)(A) and (B))

A. Achievability of the Replacement Fuel Goal

As stated above, DOE recently determined that the Replacement Fuel
Goal of 30 percent by 2010 established under section 502(b)(2)(B) is
not achievable. 72 FR 12041. Pursuant to its statutory authority to do
so, DOE established a modified goal by extending out the goal date to
2030, i.e., establishing a Replacement Fuel Goal of 30 percent by 2030.
72 FR 12041. In establishing the modified Replacement Fuel Goal, DOE
determined that such a goal is achievable.
In evaluating and modifying the goal, DOE was directed to balance
considerations in order to establish goals that are ``achievable.'' (42
U.S.C. 13254(b)) The Replacement Fuel Goal must promote replacement
fuels to the ``maximum extent possible'' while remaining
technologically and economically feasible. (42 U.S.C. 13254(a) and
(b)(2)) DOE determined that the modified goal meets these requirements,
for several reasons. First, DOE based its analysis on the best
information available, from published and peer-reviewed sources. In
particular, much of DOE's analysis was based on the Energy Information
Administration's (EIA) Annual Energy Outlook (AEO) 2005 through 2007.
Second, DOE's analysis generally was based on the current budget and
policy framework, under which many technologies show reasonable
potential for success and market penetration. Thus, the analysis
assumed virtually no major new policies or funding initiatives beyond
those already in place. Third and last, the modified goal balances the
minimum and maximum projected replacement fuel production capacities
from several reasonable scenarios. A complete discussion of the
analysis relied on in the final rule for the modified Replacement Fuel
Goal and the supporting documents can be reviewed at
http://www1.eere.energy.gov/vehiclesandfuels/epact/private/plg_docket.html
.

In evaluating a modification to the Replacement Fuel Goal, DOE
analyzed four scenarios to generate a range of potential replacement
fuel production capacities. In none of these scenarios did DOE include
potential increases in alternative fuel production as a result of a
Private and Local Government Fleet Requirement. As such DOE determined
that the modified Replacement Fuel Goal of 30 percent by 2030 is
expected to be achieved without establishing a Private and Local
Government Fleet Requirement.
Given the determination in the modified Replacement Fuel Goal final
rule that the modified goal is expected to be achieved by 2030 without
a Private and Local Government Fleet Requirement, DOE has tentatively
determined that the first prong of the ``necessity'' determination has
not been met.

B. Potential Contribution of a Private and Local Government Fleet
Requirement to the Production Capacity of Alternative Fuel

The second prong of the ``necessity'' determination requires DOE to
find that the Replacement Fuel Goal is actually achievable were a
Private and Local Fleet Requirement established. (42 U.S.C.
13257(e)(1)(B)) As stated above, DOE has determined that the modified
Replacement Fuel Goal is achievable. Although DOE has tentatively
determined that the Private and Local Government Fleet Requirement is
not necessary to achieve the modified Replacement Fuel Goal, DOE also
performed a preliminary analysis to estimate the contribution that such
a requirement would make to the Replacement Fuel Goal, if such a
requirement were established.
In the mid-1990s, DOE's initial estimate was between 1.7 and 7.3
million AFVs would be acquired over 19 years if a possible Private and
Local Government Fleet Requirement was implemented. The purchases of
AFVs under such a fleet program level out at approximately 400,000 to
500,000 AFVs annually starting in 2010. As discussed below, however,
more detailed analyses showed DOE's initial estimates were probably too
high.
Several follow-up analyses were conducted by DOE from 1996 to 2000
to attempt to determine not just how many AFVs would be required to be
acquired, but more importantly, what the potential contribution of a
Private and Local Government Fleet Requirement would be to replacing
U.S. motor fuel consumption. The limitations on the potential
contribution of a private and local government fleet program to the
Replacement Fuel Goal are discussed in section II above. In brief,
however, one DOE report issued in 1996 estimated that total fuel use
from all fleets, including private and local government fleets,
potentially covered by EPAct 1992 fleet programs to be approximately
1.2 percent of U.S. gasoline use. See Assessment of Costs and Benefits
of Flexible and Alternative Fuel Use in the U.S. Transportation Sector,
Technical Report Fourteen: Market Potential and Impacts of Alternative
Fuel Use in Light-Duty Vehicles: A 2000/2010 Analysis (DOE/PO-0042)
(January 1996) [hereinafter Technical Report 14].
DOE's Section 506 Report \2\ was only slightly more optimistic,
indicating that ``[a]lternative fuel use by EPAct [1992] covered
fleets, even with the contingent mandates for private and local
government fleets, is unlikely to provide more than about 1.5 percent
replacement fuel use[.]'' Section 506 Report at p. 35. In either case,
subtracting out the portion of replacement fuel use represented by the
existing (Federal, State, and alternative fuel provider) fleet programs
would leave the potential private and local government fleet program
contribution closer to a maximum of 1 percent.
---------------------------------------------------------------------------

\2\ See Energy Efficiency and Renewable Energy, DOE, Replacement
Fuel and Alternative Fuel Vehicle--Technical and Policy Analysis p.
viii-ix (Dec. 1999--Amendments Sept. 2000); http://www.ccities.doe.gov/pdfs/section506.pdf.

---------------------------------------------------------------------------

However, both these earlier reports included calculations based
only upon

[[Page 52501]]

the percentage of light-duty gasoline fuel use. For purposes of the
goal contained in EPAct 1992, DOE has repeatedly asserted that fuel
replacement should be considered in the context of all on-highway motor
fuel use, including heavy-duty vehicle fuel use, because the goal
contained in section 502 of EPAct 1992 are to be considered in the
context of the ``projected consumption of motor fuel in the United
States.'' (42 U.S.C. 13252(b)(2)).
The figures provided in these earlier reports, when adjusted to
reflect the impact on all on-highway motor fuel use, show that a
Private and Local Government Fleet Rule--even with a fuel use
requirement, which as noted above DOE does not have the authority to
impose--would provide at most on the order of 0.7-0.8 percent motor
fuel replacement, assuming virtually complete use of alternative fuel
in the AFVs required.
Both the analyses in Technical Report 14 and the Section 506 Report
were conducted before DOE had much experience with implementation and
operation of the EPAct 1992 fleet programs. DOE's experience with those
programs now has shown that the number of fleets originally envisioned
to be covered was far larger than the number of fleets covered in
actual practice, and that these fleets could not, in the absence of a
specific mandate, be assumed to use alternative fuel in their AFVs 100
percent of the time. Thus, DOE believes that the figures in these
reports probably overstated the potential impact of a Private and Local
Government Fleet Rule. This view was supported by analyses contained in
a later DOE-supported report, The Alternative Fuel Transition: Results
from the TAFV Model of Alternative Fuel Use in Light-Duty Vehicles
1996-2000 \3\ (TAFV Model Report), which incorporated more realistic
assumptions regarding these fleet programs. The TAFV Model Report
stated that,
---------------------------------------------------------------------------

\3\ ORNL.TM2000/168) (September 17, 2000) http://pzl1.ed.ornl.gov/tafv99report31a_ornltm.pdf
.

In particular, over all of the price scenarios, we find that the
[private and local government fleet] rule increases the alternative
fuel penetration in 2010 from 0.12 % (without the private and local
government rule) to, at most, 0.37 % [with a private and local
---------------------------------------------------------------------------
government rule] of total fuel sales.

TAFV Model Report at p. 28. Thus, the analysis in the TAFV Model Report
placed contributions from the Private and Local Government Fleet Rule
at 0.25 percent. As with Technical Report 14 and the Section 506
Report, these percentages were calculated based on the total fuel sales
of the fuel used by light-duty vehicles only.
The projected contribution from a potential rule dropped to below
0.2 percent when evaluated as part of all on-highway motor fuel use and
can be reconciled somewhat with those found by the earlier reports. As
indicated in section II above, DOE does not have authority to mandate
that AFVs acquired actually operate on alternative fuels. Experience
with the existing State Fleet Program, where fleets are similarly not
required to use alternative fuel, has shown that alternative fuel use
rates are typically in the ten to twenty-five percent range. Thus, when
adjusting the levels found in Technical Report 14 and the Section 506
Report by such utilization levels, the overall projected impacts likely
end up in about the 0.2 percent range.
It also should be noted that during earlier rulemaking processes,
no commenter presented any persuasive analysis or data to counter or
dispute the data and conclusions in Technical Report 14, the Section
506 Report, or the TAFV Model Report. Therefore, DOE concluded from
these reports that a Private and Local Government Fleet Requirement
under authority provided to DOE by EPAct 1992 section 507 would be
expected to contribute, at best, an extremely small amount toward
achievement of the Replacement Fuel Goal (below 1 percent and likely
below 0.2 percent of all on-highway motor fuel use). Even without the
additional statutory limitations described above that EPAct 1992 places
on such a Private and Local Government Fleet Requirement, the
contribution from such a mandate to the EPAct 1992 Replacement Fuel
Goal would be very small.
When the prior private and local fleets determination was conducted
in 2003 through 2004, the analyses relied upon by DOE were the most
recent, relevant analyses that it had. As such, these were all dated
2000 or earlier. With the passage of several more years between that
determination and this rulemaking, the DOE believed it was important to
conduct an updated analysis to determine if circumstances had changed
sufficiently to warrant imposition of acquisition requirements upon
fleets. The approach taken was to first conduct a somewhat more
simplified analysis than the previous ones, and if this analysis
indicated significantly different results, than a more detailed and
lengthy analysis would be commissioned.
To conduct the current analysis, the Department relied, in large
part, upon fleet industry data developed by Automotive Fleet, a leading
publisher in the field. Each year, Automotive Fleet publishes an annual
Fact Book, which includes detailed data on a number of fleet subjects.
Unfortunately, Automotive Fleet does not provide the specific data
necessary to support today's draft determination (namely the likely
number of AFVs that would need to be acquired by fleets meeting EPAct
1992's coverage criteria). Therefore the Fact Book data was used as a
starting point, with other information (such as from the EIA Annual
Energy Outlook) and various assumptions used to further refine the data
to move closer to the specific types of numbers required for today's
action.
For the purpose of today's notice, two analyses were conducted in
order to determine what portion of U.S. motor fuel use might be
replaced with replacement fuels by vehicle acquisitions resulting from
a potential fleet rule. The first method compares annual acquisitions
under a potential rule to the total annual U.S. acquisitions. The
second method of analysis compares vehicles in operation due to a
potential rule to all vehicles in operation. Both methods were used as
analogs to determine the overall percentage replacement of U.S. motor
fuel use.
According to the 2005 Fact Book (which reports data for 2004),
fleets in the United States acquired 2,849,837 light-duty vehicles
(cars and light trucks), of which 1,944,581 (68.2 percent) were
acquired for rental fleets. Since rental vehicles are specifically
excluded from coverage under EPAct 1992 section 301(9) (42 U.S.C.
13211(9)), the remaining potentially covered vehicle acquisitions drop
to 905,256 vehicles. Note that this does not exclude any leased
vehicles, of which the Fact Book indicates there were another 326,832
acquired in 2004. Many of these may ultimately be excluded as perhaps
either shorter term leases or vehicles specifically held for lease to
others (another excluded class). Since there is no way to determine
which portion of these leased vehicles would most likely be excluded,
the DOE chose to rely on the 905,256 value as the number of vehicles
purchased by fleets that would potentially be subject to a Private and
Local Government Fleet Requirement.
Next, the current annual acquisitions of vehicles already subject
to EPAct 1992 fleet requirements needed to be subtracted. Data was
obtained from the Department's EPAct 1992 Web sites, at
http://www.eere.energy.gov/vehiclesandfuels/epact/.
For Federal Fleets, there were 18,426 covered light-duty vehicles

[[Page 52502]]

acquired in 2004. For State and Alternative Fuel Provider Fleets, there
were 13,374 covered light-duty vehicles acquired. Thus, the remaining
number of potentially covered acquisitions drops to 873,456.
In 2004, a total of 16,537,440 light-duty vehicles were acquired
throughout the United States. This means that the maximum potential
pool of covered light-duty vehicles under a Private and Local Fleet
Requirement would represent 5.3 percent of total acquisitions for the
year. Because the maximum acquisition requirement percentage under the
potential Private and Local Government Fleet Rule is 70 percent (42
U.S.C. 13257(g)), the maximum potential number of AFVs that would need
to be acquired on an annual basis would be 611,419. This number
represents approximately 3.7 percent of all light-duty vehicles
acquired in the United States.
DOE's experience, however, is that the maximum potential number of
required acquisitions is quite different from the actual number of
required acquisitions. This is because section 301(9) includes several
basic requirements for coverage of a fleet's acquisitions. (42 U.S.C.
13211(9)) First, the fleet must be owned or controlled by an entity
that owns at least 50 light-duty vehicles nationwide, of which 20 must
reside in one of the 125 covered Metropolitan Statistical Areas (MSAs,
with 1980 population of more than 250,000) and are centrally fueled or
capable of being centrally fueled. (42 U.S.C. 13211(9)).
In arriving at the 50 and 20 light-duty vehicle minimums, several
classes of vehicles are excluded from consideration, including
emergency and law enforcement vehicles (42 U.S.C. 13211(9)(D) and (E),
vehicles taken home at night by employees (42 U.S.C. 13211(9)(H)), and
non-road vehicles (42 U.S.C. 13211(9)(G)). With these exclusions the
number of potentially required AFV acquisitions drops even further. For
example, if just the 2004 acquisitions of Ford Crown Victorias and
Chevy Impalas are reviewed, the non-rental numbers acquired for
commercial and government fleets totals nearly 90,000 vehicles
(according to the 2005 Fact Book). These two vehicles are often
acquired for use as police vehicles, or else taxicabs (a class of
vehicles whose status under the program is undetermined for this
analysis and for which many might not ultimately be covered due to
fleet size, location, or other reasons).
Based on DOE's experience with the Federal, State, and Alternative
Fuel Provider Fleet requirements and the vehicle classes excluded from
consideration by EPAct 1992, DOE considered two scenarios for this
analysis, one where 50 percent of the maximum potential annual
acquisitions are required (305,710 AFVs), and one (considered much more
likely) where 25 percent of the maximum potential annual acquisitions
are required (152,855 AFVs). These two scenarios thus represent 1.8 and
0.9 percent, respectively, of overall annual light-duty acquisitions.
So the net result of this portion of the analysis is that a fleet
rule could result in requirements to acquire between 150,000 and just
over 600,000 AFVs each year, representing between approximately 1 to
3.7 percent of total annual light-duty vehicle acquisitions, based on
2004 data. This portion of the annual acquisition analysis is
summarized below in Figure 1.

Figure 1.--Summary of Annual Acquisition Analysis, Fleet Vehicles
------------------------------------------------------------------------

------------------------------------------------------------------------
Total New Cars and Trucks Registered by Fleets in 2004.. 2,849,837
Total New Cars and Trucks Registered by Rental Fleets in 1,944,581
2004...................................................
Percentage in Rental Fleets............................. \1\ 68.2
Remainder of New Cars and Trucks, not in Rental Fleets 905,256
2004...................................................
New Covered LDV acquisitions in 2004, Federal Fleet..... 18,426
New Covered LDV acquisitions in 2004, State and Fuel 13,374
Provider Fleets........................................
Net New Cars/Truck Registered, not in Fleets Already 873,456
Covered................................................
Total New LDV Registrations, 2004....................... 16,537,440
Max Potential Portion of 2004 Fleet acquisitions covered 5.3%
out of total registrations.............................
EPAct 1992 Maximum Acquisition Requirement.............. 70%
Max Potential AFV Acquisitions per year, numbers of AFVs 611,419
required...............................................
Max Potential AFV Acquisitions per year, percentage of 3.7%
total acquisitions.....................................
If 50% of maximum potential actually covered, number of 305,710
AFVs required..........................................
If 50% of maximum potential actually covered, percentage 1.8%
of total acquisitions..................................
If 25% of maximum potential actually covered, number of 152,855
AFVs required..........................................
If 25% of maximum potential actually covered, percentage 0.9%
of total acquisitions..................................
------------------------------------------------------------------------

The analysis above is in the context of light-duty vehicles and
would represent between one and 3.7 percent of motor fuel consumption
by light-duty vehicles. For the purpose of section 507(e)(1)(B), DOE
must evaluate the potential contribution of a Private and Local
Government Fleet Requirement to the Replacement Fuel Goal. (42 U.S.C.
13257(e)(1)(B)) The Replacement Fuel Goal is in terms of motor fuel
consumption, including consumption from medium- and heavy-duty
vehicles. As indicated in the Energy Information Administration's
Annual Energy Outlook 2007 (AEO 2007), light-duty vehicles only account
for 75.22 percent of on-road motor fuel use in the U.S., with the
remainder consumed by medium- and heavy-duty classes, neither of which
is covered by the Private and Local Government Fleet Requirement. In
terms of total motor fuel consumption, the contribution of the
potential AFV acquisitions under a Private and Local Government Fleet
Requirement must be adjusted down to 0.7 to 2.8 percent.
The expected contribution of AFVs acquired under a Private and
Local Government Fleet to alternative fuel consumption must be further
adjusted. As explained above, EPAct 1992 does not allow DOE to require
alternative fuel use in the required AFVs, the potential consumption
values represent the portion of petroleum consumption replaced at an
alternative fuel use level of 100 percent. Experience with programs for
which fuel use is not required (such as the State Fleet Program)
indicates that the assumption of 100 percent alternative fuel use is
not realistic. DOE has seen alternative fuel usage levels as low as 10
percent.
For the purposes of this analysis, DOE looked at cases where
alternative fuels were used 50, 25, and 10 percent of the time in the
potentially required AFVs. These results yielded percentages of overall
motor fuel consumption replaced of 0.1 to 1.4 percent, with the high
value represented by the maximum potential case (already identified as

[[Page 52503]]

overly optimistic) with a 50 percent alternative fuel use level. Thus,
the likely range of consumption replaced is better represented by the
25 and 50 percent of maximum potential acquisition cases, which ranged
from 0.1 to 0.7 percent.
The summary for this portion of the analysis is shown in Figure 2,
where the shaded zone represents the more likely range of results.

Figure 2.--Summary of Annual Acquisition Analysis, Portion of Overall Motor Fuel Consumption
----------------------------------------------------------------------------------------------------------------
Maximum 50% of maximum 25% of maximum
potential potential potential
acquisitions acquisitions acquisitions
(percent) (percent) (percent)
----------------------------------------------------------------------------------------------------------------
AFVs Required, Percentage of Total LDVs..................... 3.7 1.8 0.9
Portion of Total Motor Fuel Use Due to LDVs................. 75.22 75.22 75.22
Potential Maximum Consumption Percentage for Required AFVs 2.8 1.4 0.7
(100% Alternative Fuel Use)................................
Potential Consumption Percentage for Required AFVs (50% 1.4 0.7 0.3
Alternative Fuel Use)......................................
Potential Maximum Consumption Percentage for Required AFVs 0.7 0.3 0.2
(25% Alternative Fuel Use).................................
Potential Maximum Consumption Percentage for Required AFVs 0.3 0.1 0.1
(10% Alternative Fuel Use).................................
----------------------------------------------------------------------------------------------------------------

It should be noted that this likely range of consumption
replacement under the potential rule, 0.1 to 0.7 percent, is very close
to that predicted by the TAFV report in 2000 (0.2 to 0.8 percent).
The second analysis, as indicated above, sought to use the portion
of the in-use inventory of vehicles on the road in the U.S. that were
represented by the cumulative numbers of AFVs acquired under the
potential rule as a way to determine the portion of overall motor fuel
use replaced. This case then assumes that once the program reaches the
maximum acquisition requirement (70 percent), and levels off, that all
relationships between the consumption of the required AFVs and the
overall on-road fleet are relatively unchanged over time. It also
explicitly assumes that the AFVs acquired under this potential rule use
the same amount of fuel, on average, as all other light-duty vehicles
in operation in the United States.
This second analysis, therefore, uses the annual AFV acquisition
requirements identified in the first analysis, ranging from just over
150,000 AFVs/year (25 percent of maximum potential acquisitions
covered) to just over 610,000 AFVs/year (for maximum potential
acquisitions covered). The 2004 Fact Book identifies that the average
amount of time a light-duty vehicle stays in a fleet ranges from 31 to
56 months depending on model type, or just a bit less than five years.
Therefore, in order to provide an estimate of the maximum portion of
the on-road fleet that could be AFVs due to the potential rule, the DOE
chose to use a five-year period for AFVs to operate in the covered
fleets. DOE requests comment on use of a five-year period, and requests
comment on the use of alternative fuels in AFVs after they leave a
covered fleet.
The approach taken was to develop the percentage of the on-road
vehicles in the United States that would be AFVs, once the potential
Private and Local Government Fleet Requirements reached maximum,
steady-state requirements. (Under section 507(g), the requirements
actually include a ramp-up of the AFV acquisition requirements,
starting at 20 percent and rising to 70 percent. (42 U.S.C. 13257(g))).
This steady-state, maximum case status, therefore, would be determined
by looking at the portion of the on-road fleet that would be AFVs based
upon five years of acquisitions of the AFVs required under the program.
For the maximum potential case, this meant roughly three million AFVs,
while for the 50 percent and 25 percent of maximum potential cases this
meant 1.5 million and 760,000 AFVs, respectively. Since AEO2007
identified the on-road inventory of light-duty vehicles in the United
States in 2004 as just over 215 million vehicles, this means that the
AFVs under this program would represent 0.4 to 1.4 percent of all
light-duty vehicles on the road in the United States.
But, as indicated in the first (annual acquisition) analysis above,
light-duty vehicles only represent approximately 75 percent of U.S.
motor fuel use. Therefore, even if everything else is equal concerning
consumption patterns, the percentage of all light-duty vehicles that
the AFVs under the potential program represent must be adjusted before
identifying the likely replacement of petroleum consumption. Thus, if
these AFVs are assumed to use alternative fuels one hundred percent of
the time, the maximum replacement of petroleum due to these vehicles
ranges from 0.3 to 1.1 percent.
There is, however, one final adjustment that needs to be made. Just
as in the first analysis, it must be noted that DOE cannot mandate
alternative fuel use in these vehicles. To account for less than
complete alternative fuel use, DOE further adjusted the analysis,
developing estimates for alternative fuel use from ten to fifty percent
of the time. Thus, the more likely contribution from the potential
fleet rule ranged from 0.03 to 0.3 percent. Figure 3 summarizes these
results.

Figure 3.--Summary of Cumulative Analysis
----------------------------------------------------------------------------------------------------------------
Maximum 50% of maximum 25% of maximum
potential potential potential
acquisitions acquisitions acquisitions
----------------------------------------------------------------------------------------------------------------
AFVs Required Annually....................................... 611,419 305,710 152,855
AFVs Added to Fleet over Five Years, at Maximum Fleet 3,057,096 1,528,548 764,274
Requirement (70%)...........................................
Total Number of Light-Duty Vehicles in Operation in the 215,370,000 215,370,000 215,370,000
United States, 2004.........................................
Maximum Portion of On-Road LDV Fleet that are AFVs in this \1\ 1.4 \1\ 0.7 \1\ 0.4
Program.....................................................
Portion of U.S. Motor Fuel Use from Light-Duty Vehicles...... 75.22% \1\ 75.22 75.22%

[[Page 52504]]

Potential Maximum Consumption Percentage for Required AFVs \1\ 1.1 \1\ 0.5 \1\0.3
(100% Alternative Fuel Use).................................
Potential Consumption Percentage for Required AFVs (50% \1\ 0.53 \1\ 0.27 \1\ 0.13
Alternative Fuel Use).......................................
Potential Maximum Consumption Percentage for Required AFVs \1\ 0.27 \1\ 0.13 \1\ 0.07
(25% Alternative Fuel Use)..................................
Potential Maximum Consumption Percentage for Required AFVs \1\ 0.11 \1\ 0.05 \1\ 0.03
(10% Alternative Fuel Use)..................................
----------------------------------------------------------------------------------------------------------------
\1\Percent.

In summary, the updated analysis conducted for today's action does
not appear to change significantly from those analyses relied upon for
the previous private and local fleet determination. Under either
updated analysis approach used now, the potential contribution from a
Private and Local Government Fleet rule appears to be far below one
percent, probably on the order of 0.2-0.3 percent, similar to the
levels identified in the 2003-2004 determination. Therefore no further
analyses were deemed necessary by DOE.

V. Proposed Determination

In the Replacement Fuel Goal rulemaking, DOE demonstrated how the
modified goal could be achieved through a number of replacement fuel
technologies, including biofuels, other alternative fuels, and energy
efficiency. In setting the new goal, DOE did not assume imposition of a
Private and Local Government Fleet Requirement. Indeed, given the
number of years between now and 2030, and the fact that even if DOE
were to establish a Private and Local Government Fleet Requirement, the
overall projected impact would likely be on the order of about 0.2
percent, DOE believes there is no basis for finding that such a
requirement is ``necessary.''
Therefore, DOE has tentatively determined that the Private and
Local Government Fleet Requirement is not ``necessary'' as specified in
section 507(e)(1) of EPAct 1992, and DOE is not proposing to establish
a Private and Local Fleet Requirement.

VI. Opportunity for Public Comment

A. Participation in Rulemaking

Interested persons are invited to participate in this proceeding by
submitting written data, views, or comments with respect to the subject
set forth in this notice and the proposals made by DOE. DOE encourages
the maximum level of public participation possible in this proceeding.
Individual consumers, representatives of consumer groups,
manufacturers, associations, coalitions, States or other government
entities, and others are urged to submit written comments on the
proposal. DOE also encourages interested persons to participate in the
public hearing announced at the beginning of this notice. Whenever
applicable, full supporting rationale, data and detailed analyses
should also be submitted.

B. Written Comment Procedures

Written comments (eight copies) should be identified on the outside
of the envelope, and on the comments themselves, with the designation:
``Alternative Fuel Transportation Program: Private and Local Government
Fleet Determination, NOPR, RIN 1904-AB69'' and must be received by the
date specified at the beginning of this notice. In the event any person
wishing to submit written comments and cannot provide eight copies,
alternative arrangements can be made in advance by calling Mr. Dana
O'Hara at (202) 586-9171. Additionally, DOE would appreciate an
electronic copy of the comments to the extent possible. Electronic
copies should be e-mailed to
regulatory_info@afdc.nrel.gov. DOE is
currently using Microsoft Word.
All comments received on or before the date specified at the
beginning of this notice of proposed rulemaking and other relevant
information will be considered by DOE before final action is taken on
the proposal. All comments submitted will be made available in the
electronic docket set up for this rulemaking. This docket will be
available on the World Wide Web at the following address--
http://www1.eere.energy.gov/vehiclesandfuels/epact/private/index.html.

Pursuant to the provisions of 10 CFR 1004.1, anyone submitting
information or data that he or she believes to be confidential and
exempt by law from public disclosure should submit one complete copy of
the document, as well as seven (7) copies, if possible, from which the
information has been deleted. DOE will make a determination as to the
confidentiality of the information and treat it accordingly.

C. Public Hearing Procedures

The time and place of the public hearing are set forth at the
beginning of this notice. DOE invites any person who has an interest in
this proceeding, or who is a representative of a group or class of
persons that has an interest, to make a request for an opportunity to
make an oral presentation at the hearing. Requests to speak should be
sent to the address or phone number indicated in the ADDRESSES section
of this notice and should be received by the time specified in the
DATES section of this notice.
The person making the request should briefly describe his or her
interest in the proceeding and, if appropriate, state why that person
is a proper representative of the group or class of persons that has
such an interest. The person also should provide a phone number where
he or she may be reached during the day. Each person selected to speak
at the public hearing will be notified as to the approximate time that
he or she will be speaking. A person wishing to speak should bring ten
copies of his or her statement to the hearing. In the event any person
wishing to speak at the hearing cannot meet this requirement,
alternative arrangements can be made in advance by calling Mr. Dana
O'Hara, at (202) 586-9171.
DOE reserves the right to select persons to be heard at the
hearing, to schedule their presentations, and to establish procedures
governing the conduct of the hearing. The length of each presentation
will be limited to ten minutes, or based on the number of persons
requesting to speak.
A DOE official will be designated to preside at the hearing. The
hearing will not be a judicial or an evidentiary-type hearing, but will
be conducted in accordance with 5 U.S.C. 553 and section 501 of the
Department of Energy Organization Act. (42 U.S.C. 7191) At

[[Page 52505]]

the conclusion of all initial oral statements, each person may, if time
allows, be given the opportunity to make a rebuttal statement. The
rebuttal statements will be given in the order in which the initial
statements were made.
Any further procedural rules needed for the proper conduct of the
hearing will be announced by the Presiding Officer at the hearing.
If DOE must cancel the hearing, DOE will make every effort to
publish an advance notice of such cancellation in the Federal Register.
Notice of cancellation will also be given to all persons scheduled to
speak at the hearing. The hearing may be canceled in the event no
public testimony has been scheduled in advance.

VII. Regulatory Review

A. Review Under Executive Order 12866

This proposed regulatory action has been determined to be a
``significant regulatory action'' under Executive Order 12866,
Regulatory Planning and Review. 58 FR 51735 (October 4, 1993).
Accordingly, today's action was subject to review under the Executive
Order by the Office of Information and Regulatory Affairs (OIRA). A
draft of today's action and any other documents submitted to OIRA for
review are a part of the rulemaking record and are available for public
review as provided in the ADDRESSES section of this notice of proposed
rulemaking.

B. Review Under Regulatory Flexibility Act

The Regulatory Flexibility Act, 5 U.S.C. 601-612, requires
preparation of a regulatory flexibility analysis for any rule that is
likely to have a significant economic impact on a substantial number of
small entities. The proposed negative determination under EPAct 1992
section 507(e) would not result in compliance costs on small entities.
Therefore, DOE certifies that today's proposed determination will not
have a significant economic impact on a substantial number of small
entities, and accordingly, no initial regulatory flexibility analysis
has been prepared.

C. Review Under the Paperwork Reduction Act

Because DOE has proposed not to promulgate requirements for private
and local government fleets, no new recordkeeping requirements, subject
to the Paperwork Reduction Act, 44 U.S.C. 3501, et seq., would be
imposed by today's regulatory action.

D. Review Under the National Environmental Policy Act of 1969 (NEPA)

DOE has not prepared an environmental impact statement (EIS) or an
environmental assessment (EA) for this rulemaking, and has tentatively
determined that neither is required. This notice implements the March
6, 2006, Order of the U.S. District Court of California to issue a
proposed determination under section 507(e) of EPAct 1992. Center for
Biological Diversity, 419 F.Supp 2d 1166. The Court order held that the
Secretary is not ``obligated to prepare an impact statement under NEPA
in either accepting or rejecting a fleet rule.'' Id. at 1173.
EPAct 1992 requires DOE to issue a Private and Local Government
Fleet Requirement if such a requirement is necessary. (42 U.S.C.
13257(e)) Today's notice tentatively determines that a Private and
Local Government Fleet Requirement is not necessary, and therefore DOE
is not proposing a requirement. Once the Secretary has made the
determination, the Secretary has no discretion as whether to issue the
requirement. See Center for Biological Diversity, 419 F.Supp. 2d 1166,
1173.

E. Review Under Executive Order 12988

With respect to the review of existing regulations and the
promulgation of new regulations, section 3(a) of Executive Order 12988,
Civil Justice Reform, 61 FR 4729 (February 7, 1996), imposes on
Executive agencies the general duty to adhere to the following
requirements: (1) Eliminate drafting errors and ambiguity; (2) write
regulations to minimize litigation; and (3) provide a clear legal
standard for affected conduct rather than a general standard and
promote simplification and burden reduction. With regard to the review
required by section 3(a), section 3(b) of Executive Order 12988
specifically requires that Executive agencies make every reasonable
effort to ensure that the regulation: (1) Clearly specifies the
preemptive effect, if any; (2) clearly specifies any effect on existing
Federal law or regulation; (3) provides a clear legal standard for
affected conduct while promoting simplification and burden reduction;
(4) specifies the retroactive effect, if any; (5) adequately defines
key terms; and (6) addresses other important issues affecting clarity
and general draftsmanship under any guidelines issued by the Attorney
General. Section 3(c) of Executive Order 12988 requires Executive
Agencies to review regulations in light of applicable standards in
section 3(a) and 3(b) to determine whether they are met or it is
unreasonable to meet one or more of them. Executive Order 12988 does
not apply to this rulemaking notice because DOE is not proposing any
regulations and instead is proposing to determine that regulations are
not ``necessary'' under section 507(e) of EPAct 1992.

F. Review Under Executive Order 13132

Executive Order 13132, Federalism, 64 FR 43255 (August 4, 1999),
imposes certain requirements on agencies formulating and implementing
policies or regulations that preempt State law or that have federalism
implications. Agencies are required to examine the constitutional and
statutory authority supporting any action that would limit the
policymaking discretion of the States and carefully assess the
necessity for such actions. DOE has examined today's proposed
determination and has determined that it would not have a substantial
direct effect on the States, on the relationship between the national
government and the States, or on the distribution of power and
responsibilities among the various levels of government.
Because DOE is proposing to determine that a private and local
government fleet AFV program is not ``necessary'' under section 507(e)
and therefore is not proposing the promulgation of such a program, no
significant impacts upon State and local governments are anticipated.
The position of State fleets currently covered under the existing EPAct
1992 fleet program is unchanged by this action.

G. Review of Unfunded Mandates Reform Act of 1995

Title II of the Unfunded Mandates Reform Act of 1995, Public Law
104-4, requires each Federal agency to assess the effects of Federal
regulatory actions on State, local and tribal governments and the
private sector. The Act also requires a Federal agency to develop an
effective process to permit timely input by elected officials on a
proposed ``significant intergovernmental mandate,'' and requires an
agency plan for giving notice and opportunity for timely input to
potentially affected small governments before establishing any
requirements that might significantly or uniquely affect small
governments. On March 18, 1997, DOE published in the Federal Register a
statement of policy on its process for intergovernmental consultation
under the Act (62 FR 12820). Today's notice does not propose or contain
any Federal mandate, so the requirements of the

[[Page 52506]]

Unfunded Mandates Reform Act do not apply.

H. Review of Treasury and General Government Appropriations Act, 1999

Section 654 of the Treasury and General Government Appropriations
Act, 1999, Public Law 105-277, requires Federal agencies to issue a
Family Policymaking Assessment for any proposed rule that may affect
family well-being. Today's notice of proposed determination would not
have any impact on the autonomy or integrity of the family as an
institution. Accordingly, DOE has concluded that it is not necessary to
prepare a Family Policymaking Assessment.

I. Review of Treasury and General Government Appropriations Act, 2001

The Treasury and General Government Appropriations Act, 2001 (44
U.S.C. 3516 note) provides for agencies to review most disseminations
of information to the public under guidelines established by each
agency pursuant to general guidelines issued by OMB. OMB's guidelines
were published at 67 FR 8452 (February 22, 2002), and DOE's guidelines
were published at 67 FR 62446 (October 7, 2002). DOE has reviewed
today's notice under the OMB and DOE guidelines, and has concluded that
it is consistent with applicable policies in those guidelines.

J. Review Under Executive Order 13211

Executive Order 13211, Actions Concerning Regulations That
Significantly Affect Energy, Supply, Distribution, or Use, 66 FR 28355
(May 22, 2001) requires preparation and submission to OMB of a
Statement of Energy Effects for significant regulatory actions under
Executive Order 12866 that are likely to have a significant adverse
effect on the supply, distribution, or use of energy. A determination
that a private and local government fleet AFV acquisition program is
not ``necessary'' under EPAct 1992 section 507(e) does not require
private and local government fleets, suppliers of energy, or
distributors of energy to do or to refrain from doing anything. Thus,
although today's proposed negative determination is a significant
regulatory action, if finalized the determination is not expected to
have a significant adverse impact on the supply, distribution, or use
of energy.

K. Review Under Executive Order 13432

Executive Order 13432, Cooperation Among Agencies in Protecting the
Environment With Respect to Greenhouse Gas Emissions from Motor
Vehicles, Nonroad Vehicles, and Nonroad Engines, 72 FR 27717 (May 16,
2007) requires DOE to work with DOT and EPA when conducting rulemakings
that could be considered to affect emissions. In particular, this
Executive Order requires that ``the head of an agency undertaking a
regulatory action that can reasonably be expected to directly regulate
emissions, or to substantially and predictably affect emissions, of
greenhouse gases from motor vehicles, nonroad vehicles, nonroad
engines, or the use of motor vehicle fuels, including alternative
fuels, shall'' conduct the rulemaking jointly with other agencies, to
the extent permitted by law; consider, as appropriate, laws,
information, and recommendations of the other agencies; exercise the
agency's authority effectively; and obtain concurrence or other views
by the other agencies throughout the rulemaking process. In meeting
this requirement, the Department has consulted with both the Department
of Transportation and the Environmental Protection Agency throughout
development of this proposed determination.

VIII. Approval by the Office of the Secretary

The issuance of the proposed determination for the Private and
Local Government Fleet Determination has been approved by the Office of
the Secretary.

Issued in Washington, DC, on September 6, 2007.
Alexander A. Karsner,
Assistant Secretary, Energy Efficiency and Renewable Energy.
[FR Doc. E7-18153 Filed 9-13-07; 8:45 am]

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